When you head to a conference, you do so with some assumptions. Last week the Paymode-X team at Bottomline traveled to the MRI Ascend conference to talk to real estate companies, investors and property managers from across the country, to learn more about the challenges they face and discuss the benefits of accounts payable automation.
We had some assumptions about the businesses we’d be talking to:
- Finance teams have a strong propensity to make payments by check
- Many businesses experienced fraud attempts and potentially lost money in those attacks
- Teams saddled with manual processes experience inefficiencies and frustration
Through lots of conversation and first-hand observations, some of these assumptions proved true. We then began to speak with professionals who work directly for real estate and property companies and had in-depth conversations, particularly with those in finance and accounts payable. What we discovered was eye-opening:
- 2/3 of companies receive at least half of their invoices by paper
- 61% make half of their AP payments by check
- Fraud is a serious issue, with 1/3 experiencing an attempted payments fraud attack in the last 12 months
- 1/3 of companies say they’re not earning enough rebates from their AP payments
- 54% believe their biggest AP challenge is manual payment processing – which causes significant issues like greater expense, delayed payments, and preventable errors
One thing we did not anticipate heading into the conference is the concern about missing out on early payment discounts. Almost 20% cited this as a major AP challenge, and that made it clear they’re aware of leaving money on the table.
So, what does this all mean?
It confirms the image we have of a stressed AP clerk with piles of paper surrounding them and a treasurer worrying about missed payments. It also confirms the scenario of vendors wondering where payments are, because they’re stuck in the mail. The findings tell a story of an industry that is behind the times when it comes to digital payments. Those costs are not just the costs of doing business, they are costs to the business.
Frankly, businesses are also exposing themselves to unnecessary risk. While only a third admitted to experiencing a fraud attempt, a recent Strategic Treasurer report indicates that 49% of businesses surveyed experienced a fraud attempt in the last 12 months.
Is the real estate industry more secure? I don’t think so. Instead, I imagine this is like the old saying “There are two types of businesses. Those who have been hacked and those who don’t know it.” I suspect that in some instances fraud attempts have occurred and they don’t know it.
Fraud and inefficiency add up to a grim picture. What can the stressed AP clerk and worried treasurer do? They can automate and secure the payment process. What does that mean?
Accounts payable automation is a buzzword, but also a vital one. What we’re describing here is simply taking processes that traditionally meant a call to Steve here and a check stuffed into an envelope for Susan there and streamlining them, making them less inefficient, and crucially removing opportunities for fraud.
And what will that automation give them? Well, first off, businesses in real estate can significantly reduce their fraud exposure by joining a fraud-free payments network. Secondly, they can improve cash flow. This can happen in two ways –
- Increasing rebates. We’ve seen 73% of customers receive 50%+ more in rebates after automating payments with Bottomline
- Capturing more early payment discounts. 72% of our Paymode-X customers increase early payment discounts by 25% more
The numbers don’t lie. Businesses employing real estate AP automation find themselves removing paper and improving efficiencies, which can lead to cutting processing costs by as much as half.
This is huge. Not only is there a direct cost saving those AP clerks can be working on more value-added tasks like budget analysis, forecasting, reporting, and finding even more process efficiencies.
The Bottomline: after all the great conversations at MRI Ascend, we came away with an unshakable belief that AP automation is the right fix for many of the AP woes in real estate.
Paul McMeekin, VP solutions marketing and channel sales enablement, has a passion for building high performing teams and disciplined marketing which has been proven to efficiently grow the business. This is achieved through formulating key strategies, precise market positioning, creating unique value props and executing campaigns.